1. Who are you?
I am Sebastian Diemer, Founder and Managing Director of Kreditech and an extreme sports enthusiast.
2. Which services do you sell and who are your competitors?
We have developed a novel scoring technology that predicts the credit-worthiness of individuals within a few seconds globally using “Big Data”, regardless of credit bureaus. There are no direct competitors. Lenddo, Lendup and Zestfinance are local players that move in a similar market segment. The actual scoring industry is dominated by three long-established players and has not radically evolved since the 70s.
3. How did you get your start-up idea and how did you finance your startup?
Both my co-founder and I have gained experience in banking (Deutsche Bank and LGT Capital) and startups (Rocket Internet). Our aim was to combine these areas because we do not believe that the branch banking model and the business model of banks as of today will exist after 20 years. The structural change that has long been reached in other industries (e-commerce marketplaces, advertising, etc.) is now knocking at the doors of the banking, insurance and telecom sectors. This creates unprecedented opportunities for risk-taking entrepreneurs. So far we have collected about $ 7 million in VC money- including the Samwer brothers, a well-known Silicon Valley investor, as well as various business angels (including Michael Brehm, Stefan Glaenzer, Heiko Hubertz) and a German investment bank. We are currently raising debt capital to finance our lending with 3 digit ROI.
4. What were the biggest challenges in starting?
The Bafin (Germany’s Financial Supervisory Authority). No active business in Germany. Here everything is managed and scrutinized, innovation and value is created elsewhere. Schaeuble and Roesler should perhaps sit together at a table sometime. There seem to be two different objectives here.
5. What areas within FinTech do you personally find most interesting and why?
Data-based algorithms / decision support. Scoring is certainly an exciting area, but just as exciting are data-based product recommendations. Imagine yourself a tool that, based on data from Facebook, Amazon, etc. etc., figures out exactly what stage of life I am in, what my needs are etc. and based on it recommends the appropriate financial product. This works better than any human financial advisor.
6. What opportunities do you see for FinTech startups in the DACH region, and how can we help to accelerate it?
Paradigm shift in the BaFin, otherwise the next PayPal or Square will not come from Germany.
7. What tip would you like to give FinTech entrepreneurs?
Think global- developing countries offer huge potential market with minimal competition, and regulations that are open to innovation. Do not base the Legal Entity in Germany. Germany is not attractive either as a market or as a location. You have to think outside the box.